Sebelius: IPAB Just a 'Failsafe' for Medicare Costs

But does Congress have its hands tied?

Michael Warren

July 12, 2011 2:38 PM

Downplaying the role of the controversial Independent Patient Advisory Board (IPAB), Health and Human Services Secretary Kathleen Sebelius said today that the Affordable Care Act “leaves all final decisions” on changing Medicare payment costs in the hands of Congress. “IPAB is a backstop, a failsafe, to make sure Medicare is solvent for years to come,” Sebelius said at a hearing before the House Budget Committee this morning. “It’s up to Congress whether to accept the recommendations [of IPAB] or to come up with recommendations of their own.”

Today's hearing was the first of two this week for the HHS secretary, who will also be testifying about IPAB before the Energy and Commerce Committee tomorrow. The board, a panel of 15 experts appointed by the White House, has become a target for critics of Obamacare, who point to IPAB’s outsized role in determining Medicare policies and in rationing care to seniors.

Rep. Tom Price (R-Ga.) asked Sebelius about IPAB’s precise role in cutting Medicare payments to doctors treating seniors. “The only way that the Independent Patient Advisory Board are able to effect what the physician does for the patient is to deny payment for that provision of services,” said Price. “Is that correct?”

“I don’t think that is at all correct,” Sebelius said. “I think that they look at a lot of the underlying rising costs and recommend payment strategies that much more closely align what doctors tell me they really want to do.”

Committee chairman Paul Ryan (R-Wisc.) pressed Sebelius on the introduction of more bureaucracy into seniors’ health care. “What our concern is,” Ryan said, “is if we invest all of the power and the funding decisions to a board of 15 people whose decisions go into law, don’t even go through Congress, is that the best way to save this entitlement and to restrain spending?”

“First of all, IPAB, as you know from the statute, doesn’t come into effect unless Congress has not taken action,” Sebelius replied. “I’m suggesting that if Congress is actually paying attention to the bottom line of Medicare, IPAB is irrelevant coming up with strategies and suggestions, and it never triggers anything.”

But as Mark Hemingway pointed out in May, the law provides IPAB with an easy path to transforming their recommendations into public policy:

Any decisions IPAB makes about Medicare spending automatically become law. To override IPAB requires a three-fifths majority vote in the Senate, a high legislative hurdle. Alternatively, Congress can pass its own Medicare plan that meets the same spending target. There’s no administrative process allowing doctors or citizens to challenge the board’s decisions. Since Medicare comprises about 13 percent of the federal budget, that’s an awesome amount of power to be placing in the hands of unelected bureaucrats.

“[IPAB] is not just advisory,” Rep. Diane Black (R-Tenn.) said at today’s hearing. “It has muscle. It has strength.”